Aug 12 2008
Many Britons are seemingly oblivious to the effect rising inflation has on their savings, it has been suggested.
UK inflation has risen to 4.4 per cent, recent figures show, which is more than double the government target of two per cent.
However, Moneyfacts analyst Michelle Slade claims the negative effect of this on people's savings is seemingly lost on those affected.
She warned that with inflation predicted to go over the five per cent mark before the end of 2008, many people who are saving money may be negatively affected.
"Savers need to make sure they review their existing arrangement and switch to best buy accounts paying rates higher than inflation," Ms Slade commented.
In addition, the analyst said that such savers should hope for a base rate increase when the monetary policy committee (MPC) next meets to discuss the interest rates.
An increase in the base rate of interest would help "counter the damaging effects inflation is having on the economy", she concluded.
Last week, the MPC voted to hold interest rates steady at five per cent.
